HomeFirst Finance: Q3 FY26 Performance Highlights Robust Growth and Digital Prowess

HomeFirst Finance Company India Limited has delivered a robust performance in the third quarter of fiscal year 2026, showcasing strong business momentum, enhanced profitability, and stable asset quality. The company's Assets Under Management (AUM) reached an impressive Rs. 14,925 crore, marking a significant year-on-year growth of 24.9% and a sequential increase of 5.3%. This growth underscores HomeFirst's ability to navigate a challenging credit cycle while expanding its footprint in the affordable housing finance sector. The Profit After Tax (PAT) surged by 44.0% year-on-year and 6.3% quarter-on-quarter, hitting Rs. 140 crore, with a healthy Return on Assets (RoA) of 4.0%. These figures reflect the company's disciplined execution and prudent risk management strategies.

Driving Growth Through Strategic Expansion and Digital Prowess

HomeFirst's growth trajectory is supported by a multi-pronged strategy encompassing network expansion, digital innovation, and diversified funding. The company expanded its network by adding two new branches and two touchpoints in Q3 FY26, bringing the total branch count to 165 and touchpoints to 368. This strategic expansion aims to deepen penetration in key markets and cater to a broader customer base. Disbursements reached an all-time high of Rs. 1,318 crore, demonstrating a 10.5% year-on-year growth. The management highlighted that monthly disbursements crossed Rs. 500 crore for the first time in December 2025, with a healthy origination yield of 13.1% and an 83% share of individual housing loans.

Digital adoption remains a cornerstone of HomeFirst's operational efficiency. The company reported that 81% of its approvals in Q3 were facilitated through the account aggregator framework, and over 80% of its loans were digitally fulfilled via e-agreements and e-NACH mandates. Furthermore, 96% of its customers are registered on the mobile app, with 85% of service requests raised digitally. These initiatives not only streamline processes but also contribute to the company's commitment to reducing its carbon footprint through paperless operations. The implementation of new labor codes, however, led to one-time expenses of Rs. 3.3 crore, impacting operating expenses and earnings for the quarter.

Asset Quality and Funding Profile

HomeFirst's asset quality remains robust, with early delinquencies showing improvement. The 1+ DPD (Days Past Due) decreased by 20 basis points quarter-on-quarter to 5.3%, while the 30+ DPD remained flat at 3.7%. Although Gross Stage 3 (GNPA) increased by 10 basis points quarter-on-quarter to 2.0%, the management expressed confidence in its improvement, citing enhanced collection efficiency. The total provision to loans outstanding ratio stood at 0.8%, and the GNPA to total provision coverage ratio (PCR) was 40.4% as of December 2025.

The company's funding profile is well-diversified and cost-effective, reflecting prudent financial management. Total borrowings, including debt securities, amounted to Rs. 9,926 crore as of December 2025. HomeFirst maintains a strong liquidity buffer of Rs. 4,357 crore. The cost of borrowings decreased by 10 basis points quarter-on-quarter to 8.0%, contributing to a healthy ex-co-lending spread of 5.4%. The capital adequacy ratio (CRAR) stood at 49.0%, with Tier I capital at 48.6%, indicating a strong capital base to support future growth.

Outlook and Strategic Commitments

Looking ahead, HomeFirst Finance is poised for continued growth and market leadership. The company is geared for a 25% AUM growth year-on-year for FY27, targeting an AUM of approximately Rs. 19,600-19,700 crore by March 2027. Strategic initiatives include adding 25-30 branches in FY27, with a focus on states like Madhya Pradesh, Andhra Pradesh, Tamil Nadu, and Maharashtra. The company also anticipates Uttar Pradesh to become a significant contributor from FY28 onwards. HomeFirst remains committed to responsible growth, exemplified by its Green Homes initiative, which has certified 310 homes as of December. The management's focus on leveraging technology, diversified funding, and robust risk management positions HomeFirst to thrive across various economic cycles, reinforcing investor confidence in its long-term vision.